Myspace China makes staff cuts, CEO leaves

Myspace's China office cut about 30 employees last month and saw its CEO depart, a sign that the U.S.-based social networking service may be pulling back from the country's Internet market.

An employee at Myspace China reported the staff cuts when asked on Monday. He would not disclose how many employees remain. A Chinese news report, however, said that about two-thirds of the staff had left the office.

The Chinese version of Myspace was launched with a beta version going online in 2007. The site, however, has advertised itself more as a social networking platform for music fans. But it has only become minor player in the country's Internet scene, according to analysts.

Myspace has also been reportedly preparing to downsize its total staff of 1,100 employees by 50 per cent. The site has been overtaken by Facebook in terms of numbers of users in the U.S. and globally. In October, the company launched a new version of the site in a bid to attract more users.

China is one of the world's largest Internet markets, with web users reaching 450 million, according to an official count. Almost half of those visit social networking sites, with the number of users estimated to hit 216 million for 2010, an increase from 176 million the year before, says a report from Beijing-based research firm Analysys International.

Because Myspace China focused on attracting music fans, the site has a smaller user base when compared to larger Chinese social networking sites, said Dong Xu, an analyst with Analysys International. But even among music sites, Myspace China has yet to make enough breakthroughs in tapping user potential, she said.

"It wasn't able to meet the demands of many music users, and it didn't have the products to attract them," Dong said.

Myspace's struggles in China follow in the footsteps of other popular U.S.-based websites that have faced obstacles cementing a following in the country. Facebook and Twitter are both blocked in the country, while Google has lost market share to China's dominant search engine Baidu.

"It's not a real player, never was," said Duncan Clark, chairman of Beijing-based technology consultancy BDA. Myspace's arrival in the country had arrived with much hype, but by then other social networking sites were already scaling up, he said.

Myspace "spent so much time getting shareholders, hiring the people, but they sort of focused on the setup," Clark said. "They didn’t focus on the market."

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